Correlation Between Yirendai and Pintec Technology
Can any of the company-specific risk be diversified away by investing in both Yirendai and Pintec Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Yirendai and Pintec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yirendai and Pintec Technology Holdings, you can compare the effects of market volatilities on Yirendai and Pintec Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Yirendai with a short position of Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yirendai and Pintec Technology.
Diversification Opportunities for Yirendai and Pintec Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yirendai and Pintec is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Yirendai and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Yirendai is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Yirendai are associated (or correlated) with Pintec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pintec Technology has no effect on the direction of Yirendai i.e., Yirendai and Pintec Technology go up and down completely randomly.
Pair Corralation between Yirendai and Pintec Technology
Considering the 90-day investment horizon Yirendai is expected to under-perform the Pintec Technology. In addition to that, Yirendai is 1.85 times more volatile than Pintec Technology Holdings. It trades about -0.12 of its total potential returns per unit of risk. Pintec Technology Holdings is currently generating about -0.05 per unit of volatility. If you would invest 100.00 in Pintec Technology Holdings on August 24, 2024 and sell it today you would lose (4.00) from holding Pintec Technology Holdings or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yirendai vs. Pintec Technology Holdings
Performance |
| Timeline |
| Yirendai |
| Pintec Technology |
Yirendai and Pintec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yirendai and Pintec Technology
The main advantage of trading using opposite Yirendai and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yirendai position performs unexpectedly, Pintec Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Pintec Technology will offset losses from the drop in Pintec Technology's long position.| Yirendai vs. Lexinfintech Holdings | Yirendai vs. FinVolution Group | Yirendai vs. 360 Finance | Yirendai vs. Navient Corp |
| Pintec Technology vs. Senmiao Technology | Pintec Technology vs. X Financial Class | Pintec Technology vs. Yirendai | Pintec Technology vs. Qudian Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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